TMI Blog2023 (8) TMI 1434X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee including the jurisdictional Gujarat High Court and the jurisdictional Rajkot ITAT. Delay in deposit of PF - we observe that the Principal CIT has correctly observed that the Assessing Officer has not enquired into the evident delay in deposit of PF as is visible from the tax audit report. Though, the counsel for the assessee has submitted that this was owing to a mistake on part of the tax auditors, however, the Assessing Officer should have enquired into this apparent mistake which is coming from the tax audit report filed by the assessee, which clearly mentions that there has been a delay in deposit of PF on part of the assessee. Interest on income tax refunds - We observe that the AO has not enquired into this a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opening the assessment u/s 263 is totally bad on facts as well as in law. Learned PCIT ought to have considered the fact that the assessee is duly scrutinized and all the aspects were discussed in details during the course of assessment proceedings under Section 143(3). So action of the reopening of assessment under Section 263 is not justified. 3. Learned PCIT has grievously erred in making Disallowance of claim made by the assessee amounting to Rs 30,18,710/ under Section 80P(2)(d) regarding interest income received from Rajkot District Co operative Bank Ltd. Learned PCIT ought to have considered the fact that the Rajkot District Co operative Bank Ltd. is registered under the Bombay Co operative Societies Act 1925 vide certificate N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as of the view that various judicial precedents have held that interest income received by the assessee from cooperative Bank has to be assessed as income from other sources and assessee is not eligible for deduction under Section 80P(2)(a)(i)/80P(2)(d) of the Act. Accordingly, the Assessing Officer erred in law in not taxing the aforesaid income. Further, Principal CIT observed that the assessee has also not deposited the amount of PF contribution amounting to ₹41,982/- received from employees within the due date into the Government Account. Thirdly, Principal CIT also observed that assessee had received interest on income tax refund amounting to ₹13,964/- for Assessment Year 2014-15 and ₹31,720/- for Assessment Year 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he drew our attention to page 250 of the paper book, containing the challan as proof of payment that the PF has been deposited within the due prescribed time. Further, the counsel for the assessee submitted that there was a mistake in the Tax Audit Report (Form 3CD) in which the auditors have incorrectly mentioned that EPF was deposited beyond the due prescribed date. Thirdly, regarding the interest on income tax refund amounting to ₹45,684/-, the counsel for the assessee submitted that the aforesaid amounts have been duly reflected by the assessee in the return of income and have been offered to tax during the impugned year under consideration. Accordingly, the assessment order cannot be held to be prejudicial and erroneous on this c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k without adjusting interest paid to said bank. In the case of Prime Co Op Bank Ltd. 49 taxmann.com 16 (Gujarat), the High Court held that Interest income received by a co-operative bank on its voluntary reserve in bank, bonds and small scale industrial corporation is eligible for deduction under Section 80P. The Hon ble Gujarat High Court in the case of State Bank of India Vs. CIT (2016) 389 ITR 578 (Guj), held that the interest income earned by a co-operative society on its investments held with a co-operative bank would be eligible for claim of deduction under Sec. 80P(2)(d) of the Act. The Hon ble Gujarat High Court made the following observations in respect of interest earned from deposits kept with a cooperative bank:- Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer should have enquired into this apparent mistake which is coming from the tax audit report filed by the assessee, which clearly mentions that there has been a delay in deposit of PF on part of the assessee. Further, regarding the interest on income tax refunds, we observe that the Assessing Officer has not enquired into this aspect at all. Though, the counsel for the assessee has submitted that the aforesaid amounts have been offered to tax by the assessee in its return of income, however, in our considered view, the Assessing Officer should have enquired into this aspect during the course of assessment proceedings. In the result, we are of the considered view that Principal CIT has not erred in facts and in law in holding that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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